Stimulus bill has 'Buy American' section

Friday

Jan 30, 2009 at 12:01 AMJan 30, 2009 at 1:34 PM

WASHINGTON -- Saying he couldn't understand why anyone would oppose it, Sen. Sherrod Brown defended a section of the stimulus bill that would require using American steel in all new projects financed by the measure.

WASHINGTON -- Saying he couldn't understand why anyone would oppose it, Sen. Sherrod Brown defended a section of the stimulus bill that would require using American steel in all new projects financed by the measure.

With the Senate expected next week to approve its $887 billion version of a bill aimed at sparking the economy, the "Buy American" section is prompting fears of protectionism among U.S. companies and America's trading partners, such as Canada and Europe.

"It's pretty clear that American taxpayers want their tax dollars spent on projects where materials are made by Americans," the Ohio Democrat said in an interview yesterday. "I've seen across-the-board support -- with the exception of a few economists and a few newspaper publishers -- for 'made in America.'"

He added: "It is not a trade war for us to insist that products we use in this country are made in this country."

The European Commission made clear its displeasure yesterday. The European Confederation of Iron and Steel Industries said the provision would violate the World Trade Organization pact.

The U.S. Chamber of Commerce also is opposed. Chris Braddock, a spokesman for the chamber, said: "There are a lot of unintended consequences. We're very concerned there will be retaliatory trade barriers by other countries."

"There's a good chance that it could violate the WTO and NAFTA," said Ned Hill, a professor of economics at Cleveland State University, referring to the North American Free Trade Agreement with Canada and Mexico.

"Politically, it's a brilliant idea," Hill said. "I look at this as mostly symbolic. Practically speaking, the steel will come out of U.S. stockpiles ... because there's lots of U.S. steel floating around in the yards."

"Buy American" is in the $819 billion version of the bill that the House passed this week, and Brown insists that it's there to stay. President Barack Obama has not said whether he supports the section, but Brown said he expects the White House to go along.

The Senate version includes $342 billion in tax cuts for families and businesses, compared with $256 billion in the House's. The major difference is that the Senate would shield millions of American taxpayers from the alternative minimum tax, raising the total price of the bill by $69.8 billion.

The Senate measure also calls for spending $545 billion on a variety of programs aimed at stimulating the economy or protecting the poor and middle class against the recession.

It would spend $27 billion for roads and bridges, $8.4 billion for mass transit, $3.1 billion for railroads, $16 billion to modernize public schools, $6 billion for clean-water projects, $13.9 billion for more Pell Grants for college education, and $87 billion for Medicaid, the joint state-federal program that provides health coverage for the poor.

In addition, the measure calls for $40 billion to help develop cleaner-burning energy and $13 billion in tax breaks to promote renewable energy.

The bill's large price has drawn the opposition of Sen. George V. Voinovich, R-Ohio. He has warned that the bill would add hundreds of billions of dollars to the national debt.

"We cannot save the present by mortgaging the future," he said. "And if we are going to impose more debt on future generations, then those future generations ought to see benefits from how we use that money, because they will pay for them."

Voinovich did not rule out voting for a stimulus bill, saying he hopes "we can all come together and thoughtfully develop proposals" acceptable to many Republicans.

His aides said that can happen only if Obama encourages Senate Democrats to compromise. Obama has courted House and Senate Republicans, but no House Republican voted for the stimulus package Wednesday, although House Minority Leader John Boehner, R-West Chester, called on Obama to help modify the bill to win GOP backing.

"The House Republicans who voted that way are a little bit tone-deaf," Brown said. "To them, no matter what the question is, the answer is tax cuts for the rich. And that's not what the country is looking for."

jtorry@dispatch.com

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